Because the sublet is part of your business, it is reported as business income on schedule C (not schedule E where regular rental income is reported). As Critter#2 indicated, the income is shown as other income (line 6 of schedule C) rather than included in Gross receipts or sales (line 1).
The income will increase your profit (or reduce your loss), pushing you toward a higher tax rate. Whether you get to the higher bracket depends on the amount and where you were in the lower bracket before the income.
The extra profit will be subject to self employment tax as well as income tax.
Another way to look at it is: it is not so much income as a reduction in your rental deduction for the rent you pay
